Lawyer for Iraqi detainees says no witness statements from British interrogators have been given to public inquiry

The al-Sweady inquiry was forced on the MoD after high court judges accused it of 'serious breaches' of candour over allegations of murder and ill-treatment of Iraqis. Photograph: Graham Turner for the Guardian

The Ministry of Defence has been accused of withholding evidence of "truly shocking" treatment of civilians in an incident involving the most serious allegations made so far against British forces in Iraq.

Interrogations by British military personnel involved "young men of 18, 19, and 20, some seriously injured with gunshot wounds, being stripped naked, forced to stand, not given appropriate medical treatment, and threatened with violence whilst still under the shock of capture in the middle of the night", said Patrick Connor QC, counsel for the Iraqi detainees.

He was addressing a hearing relating to the public inquiry into allegations that British soldiers murdered a number of Iraqis and abused others in May 2004 after the soldiers had been involved in a fierce gun battle. The battle became known as the Battle of Danny Boy, a British military checkpoint near Majar al-Kabir, north of Basra.

The inquiry, known as the al-Sweady inquiry after one of the alleged victims, was forced on the MoD in 2009 after high court judges accused it of "lamentable" behaviour and "serious breaches" of its duty of candour over the failure to disclose crucial information about allegations of murder and ill-treatment by British troops.

"Not a single witness statement from any of the interrogators" had been given to the inquiry, O'Connor told Thursday's hearing. He also referred to emails relating to the International Committee of the Red Cross (ICRC) after a visit to the Shaibah detention centre in southern Iraq.

Sir Thayne Forbes, the retired high court judge heading the inquiry, told the hearing: "We are very well aware of the Red Cross issue." The MoD is believed to have suppressed concerns expressed by the ICRC about the injuries they saw on the Iraqi detainees.

"I am determined as far as is humanly possible to make sure every possible document" is examined, so "that the truth emerges in the evidence to this inquiry", said Forbes.

The scale of the task facing the inquiry was made clear on Thursday as lawyers representing different interests stressed the difficulties in getting witness statements from military personnel, former military personnel and Iraqis alike. Referring to the Bloody Sunday inquiry, which took eight years and cost about £200m, they said it at least got to the truth. The al-Sweady inquiry has already cost more than £12m, with "legal services" the most expensive item. The consensus at Thursday's hearing was that it would not start until February at the earliest.

Jonathan Acton Davis QC, counsel to the inquiry, said it had so far identified 459 military witnesses, some of whom it was still trying to trace. It had obtained witness statements from 75 Iraqis, some of whom were interviewed in a Beirut hotel.

The Iraqi government is making it difficult for other potential witnesses to come forward, Acton Davis said.

The inquiry also faces a mammoth task getting written evidence from the MoD contained in tens of thousands of documents. Some are held by the Iraq Historic Allegations Team (Ihat) set up by the MoD, but independent of it, to investigate claims of abuse of Iraqis by British troops.

The Ihat has bought a new computer system, called the forensic data handling capability, which the inquiry was told was "likely to be the largest storage computer currently in operation in the United Kingdom".

It will be able to hold 110 terabytes of data, Acton Davis said (1 terabyte is equal to 1,000 gigabytes).

If that information was transferred to A4 sheets of paper, the inquiry heard, it would it fill hundreds of freight containers. Despite the task facing the inquiry, Forbes said, "we will look under every stone".

Lawyers representing the soldiers involved in the Danny Boy incident and its aftermath said those who interrogated the Iraqis were co-operating with the inquiry and to say otherwise was "simply wrong".